On 10 May the UK government made a series of announcements that affect employment law.
Firstly, a significant change to the Retained EU Law (Revocation and Reform) Bill means that we are no longer on tenterhooks about what EU laws will continue to apply. The sunset clause, which provided that EU law would be automatically
The UK government has announced new, increased statutory rates and limits that will be in place in England and Wales from April 2023. The updates impact a range of employment payments including, among others, national minimum wage rates and statutory sickness, parental and redundancy payments.
These rates are reviewed on an annual basis but, in 2023, given recent economic and inflationary pressures, they are set to increase considerably. For some employers, these increases could have a material impact on their overall wage bill and the cost of some types of operational change. We discuss some of the main changes below. Please see a list of the key new rates and limits and how they have changed.
National minimum wage (from 1 April 2023)
National minimum wage rates are set to materially increase at all levels and age categories. By way of example, the national living wage (for workers aged 23 and over) is set to rise from £9.50 per hour to £10.42 per hour.
Steps will need to be taken to increase pay for workers currently below these limits from 1 April 2023. Attention will also need to be given to workers whose pay is close to the new threshold to confirm that, when their hourly pay is calculated in accordance with national minimum wage legislation, it continues to meet statutory minimum requirements. Not doing so risks costly penalties for non-compliance (up to £20,000 per worker) as well as payments of arrears and being named and shamed on government lists.
Where changes are made to some workers’ pay for compliance with these changes but not others, employers may also want to consider the impact on overall pay structures. Is there now a smaller gap / increased pressure between the lowest paid roles and slightly higher paid roles? Will there be increased pressure from other workers to also receive an inflationary pay rise? Employers should review contracts and pay review practices to assess how these type of issues will be managed and be ready to answer employee questions. Some employers may consider one-off payments/bonuses to employees to support them during the cost of living crisis but targeting such measures at employees at the lower end of the pay scale can create its own problems in terms of justifying an arbitrary cut off point.
Continue Reading Are you ready for the new employment rates and limits in England & Wales?
As reported on our blog in November, the idea of a four-day working week is gaining momentum in the UK. Last month, the not-for-profit organisation, 4 Day Week Global, reported the results of its six-month UK trial. With 92% of reporting companies confirming they will continue with the four-day week, the trial has been reported as a resounding success. In this article, we review where the four-day working week movement may go from here and what employers should be thinking about now.
What is a four-day working week?
The UK trial typically involved working hours being reduced to 80% (or full time employees working 4 out of 5 days a week) crucially without any drop in pay. The expectation is that productivity matches or even exceeds usual standards.
There are numerous ways to structure a four-day working week depending on what best suits a particular business, including a whole business shut down on one day, staggered days off or different sets ups for different teams or times of the year (e.g. to meet seasonal demand).
Why is a four-day working week becoming increasingly popular?
Coming out of the pandemic there has been an increased focus on work life balance, mental health and wellbeing, and employers’ roles in supporting employees on these fronts. Employers in some industries have also seen a talent war emerge as they find it harder to recruit and retain the best talent.
These conditions have arguably assisted the four-day working week in gaining momentum. Happy employees enjoying a healthy work life balance are less likely to fly the nest and join the so-called “great resignation”. For the moment at least, offering a four-day working week is also sufficiently unusual that it is likely to give a competitive advantage when recruiting new talent.
If it is correct that productivity is not negatively impacted, a four-day working week provides a way to recruit and retain without the cost burden of increasing salaries. It also offers cost savings in terms of recruitment costs and, potentially office running costs and, for some employees, potentially childcare costs. Of course, the more companies that make the move, the more pressure other employers in the same industries may feel to do the same.
Other benefits include reducing carbon footprint due to less frequent commuting and a potential social impact if employers use their time off for voluntary work. There is also a view that a four-day working week could improve equality by better enabling employees with caring responsibilities to manage those responsibilities around work and therefore remain in the workforce.
What were the conclusions of the trial?
The UK trial involved just under 3000 employees across 61 organisations. The headline results were as follows:
However, it is important to note that these statistics are based on a relatively small pool. The survey response rate from the participating employees was only 58% by the end of the trial and in some cases, the no/negative change was greater than the positive story. For example, whilst 39% of employees reported being less stressed by working a four-day week, 48% reported no change in their stress levels and 13% reported increased stress. The retention and absenteeism statistics may also be skewed by the small populations involved.
The practice in the UK of ‘fire and rehire’ (i.e. dismissing an employee and offering them a new employment contract on new terms) as a way to change terms and conditions of employment is lawful, but it has been under the spotlight and subject to increased scrutiny in recent years as cases of misuse by
The National Union of Teachers has announced industrial action across England and Wales during February and March over disputes concerning pay, with national strikes on 1 February and 15 – 16 March, and several other regional dates. Scotland is also facing a rolling programme of teaching strikes until April.
With over 23,000 schools affected across England and Wales, the potential disruption for working parents and their employers should not be underestimated, especially as we do not know how long the strike action will continue. The Strikes (Minimum Service Levels) Bill is currently making its way through parliament which, if enacted, will allow minimum service levels to be required in certain sectors (including education) during periods of industrial action. This could reduce the impact of teaching strikes on working parents and their employers, but it is not law yet and will not completely eradicate the disruption even if or when it is.
Instead, employers should prepare for disruption over the coming months and consider the effects on their parent employees and other staff. Employers who anticipate the challenges faced, engage early to facilitate a solution, and plan for the longer term rather than simply the currently announced strike dates, will be best placed to minimise the impact in the workplace. Employers should also keep in mind that employees may only receive very short notice of school closures or adapted arrangements, with teachers not required to inform their employer if they intend to strike, making advanced planning more difficult in some cases. Teachers’ own childcare issues during the strikes may also impact the ability of certain schools to stay open which again, may be an issue that arises at the last minute.
Of course, occasional school closures do happen (snow days, for example, are not uncommon in winter months), and employers will be well versed with managing the knock-on impact on working parents and managing requests for, for example, emergency leave, unpaid leave, annual leave, time off in lieu (TOIL), and flexibility (such as working at home or adjusted hours of work). Strike days are, in many ways, no different but there are a few particular points to remember, plus the regular and widespread nature of the planned action provides both employees and employers with an opportunity to plan ahead.
Continue Reading Teacher strikes: How UK employers can mitigate workplace disruption
Potential reform of the statutory flexible working regime has been on the agenda for several years but finally, after a consultation first launched in autumn 2021, the UK government has announced its intention to bring about some changes. Legislation will need to be introduced, and the timescale for that is currently unknown, but employers in England, Wales and Scotland will need to be prepared to review and amend their flexible working policies and procedures to ensure they comply with the new requirements.
Contrary to some headlines, the changes do not introduce flexible working as the default position. The reforms fall short of flexibility being the starting point (i.e. only to be deviated from if there was a good reason) and instead retain the current principle that there is a right to request flexible working, but no right to work flexibly. This means that, like now, employers will still be able to turn down requests if there is a good business reason for doing so or if eligibility criteria are not met. The eight business reasons for rejecting requests (the burden of additional costs; detrimental effect on ability to meet customer demand; inability to reorganise work among existing staff; inability to recruit additional staff; detrimental impact on quality; detrimental impact on performance; insufficiency of work during the periods they propose to work; or planned structural changes) will remain the same.
Continue Reading Flexible working reforms: what do UK employers need to know?
The 2022 winter work party season is upon us, providing the first real opportunity in a few years for end-of-year celebrations. Whether at company, location, or team level, seasonal gatherings provide a chance for employers to thank staff for their hard work and for everyone to relax, socialise and have some fun with their colleagues. Yet without careful thought and planning, they can be problematic for employers who can find themselves faced with fallout from the festivities.
Here are our top tips and reminders for UK employers:
Continue Reading Get the party started: Preventing HR issues at work events
The football World Cup takes place in Qatar between 20 November and 18 December 2022, and many workers across the UK will want to follow the tournament. However, with many of the matches taking place during the working day or on a weekday evening, there are potential implications in the workplace. Here are our top tips for employers:
Continue Reading Avoiding an own goal: Managing employment issues during the World Cup
On 23 September 2022, the new Chancellor, Kwasi Kwarteng, unveiled the Growth Plan 2022 detailing the UK government’s set of economic policies aimed at, as the name suggests, boosting economic growth in the UK by improving competition and improving living standards by allowing people to retain more income. Much has been said in recent days on the merits and dangers of the plan and whilst we have seen an immediate impact on the value of the pound, it remains to be seen whether in the longer term the plan meets its aims and supports the country in navigating the likely impending recession. In the meantime, we summarise below the key elements of the plan from a UK employment perspective:
Continue Reading UK Employment Law: key messages from the UK Government’s Growth Plan
On 22 September 2022, the Retained EU Law (Revocation and Reform) Bill 2022-2023 was introduced to the House of Commons, and if passed could give rise to the most significant shake up of employment rights since Brexit.
In summary, the Bill acts to automatically repeal all retained EU law, and remove the principle of the supremacy of EU law, on 31 December 2023 (with the power to extend the revocation date to 23 June 2026) unless specific legislation is introduced to retain it.
What this means for UK employment law is unclear at the moment, but as employment rights relating to the transfer of undertakings (TUPE), annual leave and working time, discrimination and equal pay, and agency, part time and fixed term workers are derived from the EU, the potential for changes in these areas looms large.
We can only speculate at this stage, but there does not seem to be any current indication or suggestion of a radical overhaul of UK employment laws that have their origin in the EU. The UK has a strong track record of high employment standards, on occasion ‘gold-plating’ the minimum criteria required of it by the EU, and although the promised strengthening of rights through the Employment Bill are yet to materialise, the current political landscape is not conducive to a government looking to significantly reduce rights. In addition, trade unions and worker organisations would certainly be likely to vehemently challenge any proposed changes that are to the detriment of workers.
Continue Reading What next for EU derived employment rights in the UK?